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FAQs

Questions about Forex

What is Forex?

Forex or the “Foreign Exchange market", is the largest financial market in the world, with a daily average turnover of approximately US$5.5 trillion. Forex trading is the simultaneous buying of one currency and selling of another. The price of currencies is  floating and dependent on supply and demand. Foreign Exchange is always traded in pairs, for example EUR/USD.

How fair is the Forex market?

Forex is said to be “the fairest market on earth" by some because of its sheer size, and number of participants. No one player, not even the central bank of a particular country can completely control the market direction of a currency.

Where is the Forex Market located?

There is no one central location of the Forex Market, unlike the stock and futures markets Forex is not traded on an exchange but it is traded on an Over-the-Counter (OTC) basis with no central exchange between Banks, Governments, hedge funds and private investors. The forex market is open 24 hours a day 5 day per week.

Who are the main participants in the Forex Market?

The main participants in the Forex Market are Central Banks, Commercial Banks and Investment Banks, however in recent years since the advent of the internet accessibility to the Forex Markets has increased which has resulted in an increase in the number of participants. These day’s participants also include large multinational corporations, money managers, registered dealers, money brokers and private investors.

When does the Forex Market open and close?

The Forex Market is a 24 hour market, Forex trading commences in Wellington, New Zealand and moves around the globe as business days begin in each financial centre. The major global financial centers where most forex trading takes place are Tokyo, London and New York. The forex market opens on Sunday at 10:00pm (GMT) and closes on Friday at 10:00pm (GMT).

What are the most popular Forex pairs?

The most liquid currency pairs are those from countries with politically stable governments and well respected central banks. The most popular currency pairs those that are paired with the US Dollar these are nicknamed the ‘majors’ and account for around 85% of transactions. The most commonly traded pairs are the EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CHF and USD/CAD.

What makes exchange rates move?

There are a variety of fundamental and technical aspects that can cause an exchange rate to move. The most notable influences include interest rates, inflation and political stability. Sometimes governments will buy or sell a currency in an effort to influence its value with the view of having a broader effect on the country’s economy. This is known as Central Bank intervention and can have a significant impact on the value of a currency. Given the size and diversity of participants there is not one single factor that can influence the forex market for any significant length of time.

How do I manage risk when trading Forex?

There are a variety of risk management strategies that forex traders can use. The most common form of risk management is the use of stop loss and limit orders. Stop loss orders can be set within the MetaTrader 4 platform and are often used force the closure of a position at a predetermined price in order to limit any potential loss. Limit order work in much the same way as Stop loss orders however they allow a restriction to be placed on the maximum price paid.

What is the best trading strategy to use when trading Forex?

Forex Traders use a variety of trading strategies based on technical and fundamental analysis. These days technical trading is becoming increasingly popular and traders are using a variety of technical indicators such as trend lines, support and resistance levels and numerous other methods to identify short to medium term trading opportunities. Some traders choose to use fundamental analysis which revolves around interpreting economic information including news, government reports and sometimes even rumor. Often it is however elements outside of technical and fundamental analysis that have the most dramatic effect on currency prices, this includes events such as Central Bank intervention, interest rate changes, political change or even war.

Is trading the Forex market expensive?

No, trading forex has never been cheaper and more accessible. Traders can now trade on institutional grade pricing with a deposit as little as $500 and leverage up to 200:1. It is however important to remember that although trading on leverage can maximise profits it can also amplify losses.

Questions about Capstone prime

Who is Capstone?

Capstone prime was founded by specialists in the FX industry and investment bankers to provide FX, derivatives trading and related services to institutional and retail clients.Capstone aims to create a pure trading environment by 100% DMA, lower trading costs and better order execution. For further information on Capstone please refer to the About Us page.

Is Capstone a regulated broker?

Yes, Capstone is a fully regulated broker. For more details please refer to our Regulation and licensing page.

Where are my funds held?

Capstone holds client funds in Segregated Client Accounts with NATWEST . Both banks are AA credit ratings top tier-1 banks.

Who is your liquidity providers?

Capstone aggregates liquidity from 20+ top tier-1 banks and ECN venues to provide the best quotes and order execution from the interbank market for you to trade on.

Questions about Trading with Capstone

What is the minimum amount required to open a live account with Capstone prime?

Capstone prime allows clients to open a Standard account with as little as US$500 or currency equivalent.

What leverages does Capstone prime offer?

Capstone  prime offers flexible leverage options ranging from 100:1 to 200:1.

Can I have multiple trading accounts with Capstone?

Capstone allows you to open multiple trading accounts. You can open an additional account via My Capstone or by sending your request to us at accounts@capstoneglobal.com.

What time does Capstone prime open and close its prices?

Opening time:
21:00 MetaTrader 4 Server Time(Sunday Summer Time)
22:00 MetaTrader 4 Server Time(Sunday Winter Time)

Closing time:
21:00 MetaTrader 4 Server Time( Friday Summer Time)
22:00 MetaTrader 4 Server Time( Friday Winter Time)

What time does Capstone Rollover occur?

Capstone rollover occurs at 00:00 MetaTrader4 Server Time.

What are Capstone prime’s trading hours of Gold and Silver?

The trading hours for Gold and Silver (XAUUSD and XAGUSD) are:

Opening time:
22:00 MetaTrader 4 Server Time(Sunday,Summer Time)
23:00 MetaTrader 4 Server Time(Sunday,Winter Time)

Closing time:
21:00 MetaTrader 4 Server Time(Friday,Summer Time)
22:00 MetaTrader 4 Server Time(Sunday,Winter Time)

Daily break:
21:00-22:00 MetaTrader 4 Server Time(Summer Time)
22:00-23:00 MetaTrader 4 Server Time(Winter Time)

How many currency pairs does Capstone offer?

Capstone offers 36 currency pairs.

How many CFDs does Capstone prime offer?

Capstone prime offers 16 index CFDs,2 oils including WTI and Brent and copper.

How can I deposit funds with Capstone prime?

Capstone prime offers clients three funding methods:

• Bank / Wire Transfer
• Credit Card
• China Union Pay

More details please visit Deposits and withdrawals page to look through.

How long does it take for funds to be credited in my account?

• Wire transfer: 1-2 working days
• Credit card: instant
• China Union Pay: 0.5-1 hour

How can I open a live account with Capstone prime?

You can open an account via My Capstone, login to it and fill in an online account application.Once completed and approved by our Accounts Dept, your MT4 login details will be sent to your registered email address with Capstone prime.

What documents do I have to provide Capstone prime to open a live account?

• Photo ID is a must
• Proof of address may be required by our Accounts Dept. to further verify you.

Does Capstone prime accept US Clients?

No. US CTFC regulation prevents US clients from trading with NON-US brokers.

Are Scalping and Hedging allowed?

Yes, Capstone prime accepts all trading styles based on our exceptional trading conditions.

If I stop trading will I be charged an inactivity fee?

No, you will not be charged any account inactivity fees.

Are Demo Accounts the same as Live Accounts?

Both Demo and Live accounts have the same price feed, however it is not possible to replicate a real trading environment on a Demo account due to technical limitations. Trades placed on demo accounts are not passed into the real market and therefore their execution will not directly comparable to trades placed on a Live account. Demo accounts are designed to allow traders to become familiar with the trading platform itself and will never be able to provide an identical trading experience to a Live account.

Questions about MetaTrader 4

How can I see all the tradable instruments?

To view all instruments, right click on the market watch and then choose ‘Show All’.

My MetaTrader 4 shows ‘Trade Context is Busy’ and what does this mean?

MetaTrader 4 cannot process multiple requests at the same time, and to fix the error, simply close and reload the platform.

How can I find the swap rates?

Go to the market watch area, right click and choose symbols. Click on the properties for a trading symbol and it will give you all details including the swap rates.

Why am I charged triple swap rates for the positions held from Wednesday to Thursday?

Three days’ swap rates including Saturday’s and Sunday’s are charged on the positions held from Wednesday to Thursday because of closure of the market over the weekend.

Why can’t I login to my demo account?

Capstone’s demo account expires after 30 days, and however, you can register another new demo account for practice.

Why does my account show “invalid account”?

Invalid account shows when the login or password is incorrect. Please check your login, password and the server address.

Why can’t I place a stop loss or take profit order along with my trade?

On market execution you cannot place your stop loss or take profit order before execution of the market order.And once executed, you can then add your stop/limit orders through the Terminal.

Why is my Expert Advisor (EA) not working?

In order for Expert Advisors to function on MetaTrader 4 you must click on the expert advisors button in your trade terminal to enable this feature.

Questions about Trading Forex

What is the spread?

The Spread is the difference between the BID price and the ASK price in the market quotes. The ASK price is applicable to a BUY order and the BID price is applicable to a SELL order.

What are the fees, commissions for trading with Capstone?

Capstone does not charge any commissions on all our account types but rather a markup on the spread Capstone receives from our liquidity providers.

What is the minimum lot size that I can trade?

Capstone supports Micro lot, which equals 0.01 lot or 1,000 units of base currencies.

What is Margin?

Margin refers to the funds that you are required to have in your accounts in order to guarantee your open positions.

How can I calculate margin?

Capstone’s Margin Calculator allows you to quickly and easily calculate how much margin is required in order to open a given position. The calculation is performed as follows:
Required Margin =({BASE Currency} / {Account Currency}) * units) / leverage

In our example of trading EUR/JPY the above terms in the formula translates as follows:
Account Currency = USD
BASE Currency = EUR; Quote Currency= JPY
Base Currency / Account Currency = Current Exchange Rate of EUR/USD
Units = 10,000
Now let’s say that the current exchange rate of EUR/USD is 1.29000 hence “Base Currency / Account Currency" = 1.29000

Leverage is also called Margin ratio. Let’s say the leverage you use for your Forex trading is 100:1 then the margin requirement = (1.29000*10,000)÷100 = US$129

What happens if I have no free margin left in my account?

If you have no free margin in your account, your positions will be stopped out.

What is Capstone’s margin call level?

Capstone’s margin call level is 150% this means that you will receive a margin call when your Equity is 150% of the margin required on your open positions.

*How to calculate equity please see below.

What is Capstone’s stop out level?

Capstone’s stop out level is 100%,which occurs when your equity drops to 100% of your used margin. At that point, the system will close all your open trades automatically.

The calculation formula is this: (Equity/ Used Margin) *100%.

What is a pip?

A “pip" is the smallest whole increment in any Forex pair.
For pairs quoted in 3 decimal points a pip increment is based on the second decimal.
For pairs quoted in 5 decimal points a pip increment is based on the fourth decimal, like EURUSD
below:

Example:
EURUSD: a movement from 1.362(9)8 to 1.363(0)8 is a 1 pip
In USDJPY, a movement from 104.4(7)1 to 104.4(8)1 is 1 pip

How can I calculate pip value?

If USD is the quote currency, e.g. EURUSD:
(Units: 1 lot = 100 000, 0.1 lot = 10 000, 0.01 lot= 1000)
1 pip = tick size x units

If USD is the base currency, e.g. USDCHF:
1 pip = tick size x units/current quote

If it is a cross currency pair, e.g. EURGBP:
1 pip = tick size x units x base quote(EURUSD)/current quote (EURGBP)

How can I calculate equity?

Equity = Balance + Floating Profit/Loss

How can I calculate margin level?

Margin Level = (Equity/Margin) x 100

Can I set pending orders in Capstone’s MetaTrader 4?

Yes. MetaTrader 4 allows pending orders to be set.

Can I set trailing stop orders in Capstone’s MetaTrader 4?

Yes. MetaTrader 4 allows trailing stop orders to be set.

What does the order confirmation window mean?

The order confirmation window displays a summary of the order that you have placed including the order number, quantity (volume) and price the order was filled at. The date and time the order was placed is displayed in the trade window.

How can I generate account statements?

You can generate your own reports from the trading terminal by selecting the history tab. Then right click the history shown to choose the period of time to see the report. By right clicking again, you can also choose to save the report to disk in html format convenient for viewing in your web browser.

How long can I keep my positions open for?

There is no limit on the period of your holding positions.

What is Capstone’s slippage policy?

Capstone does not guarantee that there is no slippages, especially when there exists a volatile market during news releases.Details please refer to our Best Execution Policy at our Legal Documentation page.

How do the charts on MetaTrader 4 work?

The charts on MetaTrader 4 reflect the “Bid" price only, You can however add an “Ask" line on the charts by right-clicking on the chart to choose “properties” and then select ‘show ask line’, which will result in an display of the “Ask" price based entirely on the spread.

Where are your Meta trader 4 servers located?

NY4 and LD5. For further details please refer to our Equinix page.

How can I know the latency from my computer to your MetaTrader 4 server?

You can click the connection status of the MetaTrader 4 and check the latency from your computer to our MetaTrader 4 server.